MARKET CLOSE: NZ shares rise, helped by Wall St gains; PGW, FPA rise

Tuesday 4th May 2010

New Zealand shares rose for the third day in four, buoyed by stronger equities on Wall Street and optimism the global economy is slowing coming back to speed. PGG Wrightson, Guinness Peat Group and Fisher & Paykel Appliances led the advance.

The NZX 50 Index rose 17.66, or 0.5%, to 3298.01. Within the index, 26 stocks rose, 11 fell and 13 were unchanged. Turnover was $60 million.

Shares rallied on Wall Street, sending the Dow Jones Industrial Average up 1.3% after figures showed manufacturing grew in April at its fastest pace in almost six years, while construction spending unexpectedly rose.

Across Asia today, Japan’s Nikkei 225 Index gained 1.2%, while Australia’s S&P/ASX 200 Index fell about 1% as the central bank raised its key interest rate a quarter point to 4.5% and mining companies continued to suffer from the government announcing of a new super tax on profits.

Wrightson, the nation’s biggest rural services company, gained 3.8% to 55 cents ahead of Fonterra Cooperative Group’s monthly milk powder auction, which may show recent strong gains are continuing unabated. Investors are also weighing whether Rural Portfolio Investments will be forced to sell its holding in Wrightson after running out of cash.

Guinness Peat gained 3.4% to 91 cents as investors await the company’s annual shareholder meeting in London this week, where the investment group has promised to unveil its proposal for a “value return” to shareholders.

F&P Appliances gained 3.1% to 67 cents on optimism demand is rising in the US.

“Improving conditions in the States might be helping – one broker I follow upgraded his forecast and recommendation” for FPA, said Craig Brown, a fund manager at ING New Zealand.

Goldman Sachs JB Were analyst Adrian Allbon raised his forecast for 2011 adjusted earnings to $42.1 million, compared with a consensus of $41.3 million. Whirlpool's first quarter earnings-per-share were US$2.13 compared with the analysts’ estimate of US$1.33 consensus forecast.

Ecoya, the scented candle marketer that debuted on the NZX yesterday after raising $10 million in its initial public offering at $1 apiece, rose 1% to $1 on its second day of trading. The Auckland-headquartered, Sydney-manufacturing company plans to expand in North America, followed by Asia and has pointed to the plans of global rival L’Occitane to list on the Hong Kong stock exchange as a sign that the fragrance sector attracts investors.

Genesis Research and Development slumped 25% to 3 cents and has halved in the past two days after announcing it has suspended New Zealand operations and said it may tip its assets into a new company as funds dry up.

NZ Windfarms climbed 3.9% to 27 cents after fund managers Tyndall Investment and AMP Capital Investors disclosed they own almost 30% of the company, in separate substantial shareholder notices today. The company is emerging from a troubled period of negative cash flow and supplier disputes which saw it trade under a fundamental uncertainty warning.

Kathmandu Holdings, the outdoor equipment chain, fell 2.6% to $2.29, leading decliners on the NZX 50 today. Air New Zealand fell 2.2% to $1.31.

Businesswire.co.nz

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